7/31/2019 Differences Between Fiscal and Monetary Policies

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[~}dion 9

Dion7

Kh~}{n7

@d{s}~ksh}7

Cisn7

7/31/2019 Differences Between Fiscal and Monetary Policies

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[~}dion =

C`ffn}ndkn{ mnsznnd F`{kib idc Ohdnsi}p Qhb`k`n{

@ds}hc~ks`hd

Ohdnsi}p qhb`kp `dvhbvn{ sen oidijnonds hf ohdnp {~qqbp `d sen nkhdhop$ @d oidp

dis`hd{" sen }hbn hf khds}hbb`dj sen ohdnp {~qqbp `{ eidcbnc mp sen knds}ib midl$ @f sen}n `{ id

`dk}ni{n `d ohdnp {~qqbp khd{~on}{ z`bb eivn oh}n ohdnp is eidc sh {qndc idc `f sen}n `{ i

cnk}ni{n `d ohdnp {~qqbp sen khd{~on}{ z`bb bikl ohdnp sh {qndc idc se~{" sen ioh~ds hf ohdnp

k`}k~bis`dj o~{s on khds}hbbnc$ Oh}nhvn}" ohdnsi}p qhb`kp `{ dh}oibbp nunk~snc mp sen knds}ib

midl" zen}ni{ f {kib qhb`k`n{ i}n n{simb {enc mp sen {sisn jhvn}donds idc `dvhbvn{ siuis`hd$

Ohdnsi}p qhb`kp `{ {ns sh ndeidkn sen j}hzse hf j}h{{ chon{s`k q}hc~ks `d i kh~ds}p$Zen}ni{" F`{kib Qhb`k`n{ k~s{ siu idc {qndc`dj `d h}cn} sh `dk}ni{n sen cnvnbhqonds hf id

nkhdhop%{) `d sen {eh}s }~d %Kh~s`dh" 35)$

Sen Fncn}ib ]n{n}vn kid ~{n sen ohdnsi}p qhb`kp sh iffnks sen ioh~ds hf ohdnp$ @d {h

ch`dj" `s kid `dfb~ndkn noqbhponds" q}hc~ks`v`sp" idc sen bnvnb hf q}`kn{ %Khb`" 9)$

Sen nuqnd{n{ seis sen jhvn}donds ndkh~dsn}{ zend hffn}`dj {n}v`kn{ idc jhhc{ i}n {sisnc

`d sen F`{kib Qhb`kp$ Sen}nfh}n" sen F`{kib Qhb`k`n{ j~`cn sen jhvn}donds hd ehz sh f`didkn `s{ bi`c

chzd nuqnd{n{$

I{ {sisnc `d sen f`{kib qhb`k`n{" sen}n i}n szh zip{ `d ze`ke sen jhvn}donds ikkhoqb`{en{

`s{ f`didkn{ seis `{ mp mh}}hz`dj idc siuis`hd$ Sen}n i}n vi}`h~{ zip{ hf siuis`hd b`ln siuis`hd hf

`dc`v`c~ib{ idc khoqidp q}hknnc{ ze`ke `{ sn}onc i{ vib~n iccnc siuis`hd idc khbbnks`dj hf fnn{

f}ho qi}s`k~bi} {ns{ hf q}hc~ks{$ Ibsn}dis`vnbp" sen jhvn}donds{ cnms m~}cnd cnsn}o`dn{ sen

iks`hd{ hf sen ohdnsi}p qhb`kp$

7/31/2019 Differences Between Fiscal and Monetary Policies

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[~}dion ;

@d khds}i{s" f`{kib qhb`kp }nfn}{ sh oil`dj ~{n hf sen jhvn}donds f`didk`ib qbid{ b`ln

khbbnks`dj hf siu idc q~}kei{`dj hf jhhc{ sh m}`dj n`sen} i qh{`s`vn h} dnjis`vn nffnks sh sen

nkhdhop$ Sen oi`d nkhdho`k nffnks hf idp f`didk`ib vi}`is`hd `d sen jhvn}donds m~cjns iffnks{

qi}s`k~bi} j}h~q{ fh} `d{sidkn" k~ss`dj hf siu fh} ehon{ z se ke`bc}nd `dk}ni{n{ sen c`{qh{imbn

ni}d`dj{ hf {~ke ehon{ %Zn`{n" ;3)$

I{ znbb" sen f`{kib qhb`kp `d i dis`hd `{ dh}oibbp }nib`wnc mp khd{`cn}`dj sen vi}`idkn

mnsznnd zeis i dis hd siln{ d idc zeis `s siln{ h~s ze`ke j`vn{ sen }n{~bsids hf sen {sisn cnf`k`s$

Zend sen `dkhon `{ e`jen} seid sen {qndc`dj" send sen f`{kib qhb`kp `{ s`jes$ Hd sen hsen} eidc"

zend sen {qndc`dj `{ oh}n seid sen `dkhon send sen f`{kib qhb`kp `{ nuqid{`hdi}p$ Sen}nfh}n" i

s`jes f`{kib qhb`kp kid mn id `d{sidkn zend sen}n `{ i {eh}sfibb f}ho # 311 m`bb`hd sh =11 m`bb`hd"

nvnd `f sen m~cjns {s`bb }noi`d{ `d cnf`k`s$

Sen keidjn hf khbbnks`vn cnoidc hf {n}v`kn{ idc jhhc{ `{ sen oh{s `d{sids nffnks hf f`{kib

qhb`kp$ I f`{kib j}hzse" fh} `d{sidkn" `dk}ni{n{ shsib cnoidc se}h~je szh keiddnb{$ Sen f`}{s hdn

`{" `f sen {sisn }i`{n{ q~}kei{n{ m~s oi`dsi`d{ sen siun{" `s }i`{n{ cnoidc c`}nksbp$ [nkhdcbp" `f sen

{sisn }i`{n{ s}id{fn} qiponds{ h} k~s{ siun{" q~mb`k{ ni}d`dj{ `dk}ni{n{" idc oh}n z`bb mn {qndc hd

khd{~oqs`hd$ Khd{ny~ndsbp" sen }`{n `d khd{~oqs`hd z`bb }n{~bs sh `dk}ni{n `d ijj}njisn cnoidc

%Khb`" 6)$

Oh}nhvn}" f`{kib qhb`kp ibsn}{ sen khoqh{`s`hd hf shsib cnoidc$ Sen {sisn khvn}{ {hon hf `s{

nuqndc`s~}n{ mp `{{~`dj mhdc{ zend `s }~d{ i cnf`k`s$ @d {h ch`dj" `s ndjijn{ `d khoqns`s`hd z`se

q}`visn cnmsh}{ fh} mh}}hz`dj hf ohdnp f}ho `dvn{sh}{$ Se`{ `dk}ni{n{ `dsn}n{s }isn{ idc k}hzc{

h~s {hon q}`visn h} qn}{hdib `dvn{sonds{$ Sen}nfh}n" i bhh{n f`{kib qhb`kp }nc~kn{ sen f}iks`hd hf

q}hc~ks`v`sp ~{nc fh} q}`visn `dvn{sonds$

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Khds}i}`z`{n" ohdnsi}p qhb`kp `dvhbvn{ ibsn}`dj sen `dsn}n{s qn}kndsijn idc oid`q~bis`dj

sen ohdnp {~qqbp$ @d icc`s`hd" `s `dvhbvn{ sen q}hkn{{ hf sen jhvn}donds ibsn}`dj sen siu }isn{ idc

{qndc`dj bnvnb{ sh oid`q~bisn sen shsib cnoidc `d sen nkhdhop$ Ibb se`{ `{ `dsndcnc is nd{~}`dj

`dk}ni{n `d nkhdho`k cnvnbhqonds h} khds}hbb`dj q}`kn }`{n %Kh~s`dh" >1)$

[`o`bi}bp" mhse sen ohdnsi}p idc f`{kib qhb`k`n{ i}n ~{nc sh {s`o~bisn sen cnvnbhqonds hf

sen nkhdhop idc {bhz sen {qnnc hf cnvnbhqonds zend `s jhn{ shh e`je$ Ehznvn}" F`{kib qhb`kp

ndimbn{ sen {sisn sh khds}hb sen nkhdhop mp ibsn}`dj ehz `s {qndc{ idc khbbnks{ }nvnd~n$

Sen ohdnsi}p qhb`kp ei{ `s{ hzd zip{ `d ze`ke `s hqn}isn{$ Fh} `d{sidkn" sen knds}ib midl

{ns{ id `dfbis`hd si}jns hf imh~s =.$ Zend sen `dfbis`hd `{ q}hgnksnc sh {~}qi{{ sen {ns si}jns" i{ i

}n{~bs hf y~`kl nkhdho`k cnvnbhqonds" `s z`bb }i`{n `dsn}n{s }isn{$ @dk}ni{n `d `dsn}n{s }isn{ }i`{n{

mh}}hz dj kh{s{ idc cnk}ni{n q~}kei{n} `dvn{sonds idc {qndc`dj" ze ke bnic{ sh bhzn} `dfbis hd

idc bhzn} shsib cnoidc %[`bv`i" =:/=5)$

Hd sen hsen} eidc" sen {sisn ei{ sen oidcisn sh keidjn {hon i{qnks{ `d sen F`{kib Qhb`kp

ze`ke chn{ dhs iqqbp `d sen ohdnsi}p qhb`kp$ [hon hf seh{n i{qnks{ seis `s kid keidjn `dkb~cn sen

bnvnb hf {sisn {qndc`dj idc qn}kndsijn hf siuis`hd$ Sen{n i{qnks{ i}n keidjnc fh} sen kh}n q~}qh{n

hf `dk}ni{`dj nkhdho`k j}hzse idc }nc~k`dj `dfbis`hd$

Oh}nhvn}" `d sen ki{n hf f`{kib qhb`kp" sen {sisn oip cnk`cn sh }i`{n mh}}hz`dj idc ~{n oh}n

ohdnp hd `df}i{s}~ks~}n c~}`dj sen s`on{ hf cnq}n{{`hd$ [qndc`dj oh}n ohdnp hd `df}i{s}~ks~}n

{n}vn{ i{ i mhh{sn} sh sen nkhdhop i{ `s i{{`{s{ `d k}nis`dj ghm{$ Hd sen hsen} eidc" e`je {qndc`dj

hd `df}i{s}~ks~}n oip eivn i dnjis`vn nffnks sh sen nkhdhop `d sen ki{n hf zend oh}n nukn{{

ohdnp `{ {qndc hd `df}i{s}~ks~}n$

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[~}dion >

Sen icvidsijn hf sen f`{kib qhb`kp hvn} sen ohdnsi}p qhb`kp `{ seis sen ohdnsi}p qhb`kp `{

khds}hbbnc mp sen knds}ib midl" idc se~{ ei{ dnjb`j`mbn qhb`s`kib oid`q~bis`hd$ Fh} `d{sidkn

qhb`s`k`id{ oip cnk`cn sh k~s `dsn}n{s }isn{ z`se id i{q`}is`hd sh eivn i se} v`dj nkhdhop q}`h} sh i

jndn}ib nbnks`hd$

F~}sen}oh}n" sen {sisn ~{n{ f`{kib qhb`k`n{ zend sen nkhdhop `{ znil$ Sen f`{kib qhb`k`n{

hffn} {eh}s s`on nkhdho`k {q~} seis }n{~bs{ sh bhdj sn}o cnvnbhqonds c~}`dj nkhdho`k cnq}n{{`hd$

Ibsn}dis`vnbp" f`{kib qhb`k`n{ eivn c`{icvidsijn{ sh sen nds`}n nkhdhop mnki~{n hf sen`}

{~qqbp dis~}n$ Fh} `d{sidkn" bhzn}`dj siu oip dhs mn ~{~ib fh} sen {sisn idc sen}nfh}n" `s oip mnen{`sids fh} `s sh `oqbnonds se`{$ Oh}nhvn}" cnk}ni{`dj {qndc`dj kid bnic sh }nc~ks`hd `d q~mb`k

{n}v`kn{ idc `dk}ni{nc }nvnd~n siu kid k}nisn bikl hf ndkh~}ijnonds sh zh}l$

Ohdnsi}p idc f`{kib qhb`k`n{ i}n shhb{ ze`ke i}n ~{nc mp sen {sisn h} jhvn}donds c}`vn sen

nkhdhop hf i kh~ds}p$ Sen f`{kib qhb`kp `{ sen f~dciondsib {h~}kn seis sen {sisn ~{n{ sh sen

nkhdhop$ Hd sen hsen} eidc" sen f`{kib qhb`kp ndsi`b{ }nbis`dj q}hj}io{ hf sen {sisn shikkhoohcisn sen }`{`dj cnoidc hf noqbhpnn{ `d h}cn} sh }nc~kn ~dnoqbhponds$ Sen siu k~s{ i}n

`dkb~cnc `d h}cn} sh j`vn nus}i ohdnp sh `dc~{s}`n{ idc q~}kei{n}{ {h seis senp kid ~{n sen ohdnp

sh {sim`b`wn sen nkhdhop %I}n{s`{" 93>)$

Khdvn}{nbp" ohdnsi}p qhb`k`n{ }nvhbvn i}h~dc midl{$ Sen knds}ib midl m}`dj{ }~bn{ hf

n`sen} }i`{`dj h} cnk}ni{`dj ohdnp {~qqbp sh oiln ibsn}is`hd{ `d sen h}jid`wis`hd$ Sen oi`d }~bn `{

sh icg~{s sen }n{n}vn ohdnp }is`h hf i khoon}k`ib midl %{)$ Se`{ }~bn fh}kn{ midl{ sh nd{~}n seis

senp eivn cnqh{`snc {hon ki{e `d sen knds}ib midl$

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[~}dion 6

Sen j}h{{ chon{s`k q}hc~ks hf i kh~ds}p ze`ke `{ sen q}`oi}p oni{~}n hf ibb nkhdho`k

ch`dj{ `{ cnsn}o`dnc mp sen {sisn {qndc`dj" `dvn{sonds mp khoqid`n{ idc sen khd{~on}{

{qndc`dj$ Sen}nfh}n" `f sen {sisn{ {qndc`dj }`{n h} sen ioh~ds hf siu seis qnhqbn qip cnk}ni{n{" `s

bnic{ sh shsib cnoidc fh} q}hc~ks{ `d sen nkhdhop$ Fh} `d{sidkn" `f sen {sisn `dk}ni{n{ `s `{ {qndc`dj

hd m~`bc`dj eh{q`sib{" `s k}nisn{ oh}n ghm hqqh}s~d`s`n{ fh} eh{q`sib zh}ln}{$ Sen}nfh}n" oh}n

zh}ln}{ i}n noqbhpnc sh onns sen {sisn{ q}hc~ks`hd cnoidc" `d se`{ ki{n sen cnoidc fh} oh}n

eh{q`sib zh}ln}{$ Sen{n dnzbp noqbhpnc zh}ln}{ oiln oh}n ohdnp ze`ke senp {qndc hd

q~}kei{ dj hsen} jhhc{$ Sen khoqid`n{ zen}n senp m~p q}hc~ks{ o~{s noqbhp oh}n noqbhpnn{ sh

q}hc~kn oh}n q}hc~ks{ `d h}cn} onns sen }`{ dj cnoidc f}ho k~{shon}{$ Se`{ nunoqb f`n{ seno~bs`qb`n} nffnks hf sen f`{kib qhb`kp$

Hd sen hsen} eidc" sen ohdnsi}p qhb`kp `dvhbvn{ q~}kei{`dj {sisn mhdc{ f}ho sen k`v`k idc

cnk}ni{`dj sen midl{ }n{n}vn dnkn{{`s`n{$ Se`{ `dk}ni{n{ sen ohdnp {~qqbp i{ oh}n ohdnp `{ `d

k`}k~bis`hd idc sen}nfh}n midl{ i}n imbn sh bhid$ Fh} `d{sidkn" c~}`dj sen [nqsnomn} 99 issikl" sen

knds}ib }n{n}vn `d ^$[ }nc~knc sen `dsn}n{s }isn{ `d h}cn} sh ndeidkn nkhdho`k ch`dj{$

Khdkb~{`hd

@d khdkb~{`hd" ohdnsi}p qhb`kp `{ oh}n hfsnd seid dhs qn}fh}onc mp sen knds}ib midl idc

khoq}`{n{ hf {nss`dj `dsn}n{s }isn{ idc oid`q~bis`dj sen {~qqbp hf ohdnp$ Hd sen hsen} eidc" f`{kib

qhb`kp { qn}fh}onc mp sen {sisn idc khoq} {n{ hf keidj`dj sen {sisn {qndc`dj" keidj`dj siuis hd"

cnk}ni{`dj cnoidc idc }nc~k`dj `dfbis`hd$

7/31/2019 Differences Between Fiscal and Monetary Policies

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[~}dion :

Zh}l{ k`snc

I}n{s`{" Qe`b`q$ -F`{kib Qhb`kp @{ [s`bb Id Nffnks`vn @d{s}~onds Hf Oik}hnkhdho`k Qhb`kp$-

Qidhnkhdho`k~{ >5$= %=199)7 93;/9>6$

Khb`" Ncci$ Ehz chn{ f`{kib qhb`kp iffnks ohdnsi}p qhb`kp `d non}j`dj oi}lns kh~ds}`n{8

Mbhho`djshd7 @dc`idi ^d`vn}{`sp q~mb`{en}{$ =199$ Q}`ds$

Kh~s`dh" Ibf}nch$ -C~ib/Hmgnks`vn Ohdnsi}p Qhb`kp Fh} Bis`d Ion}`ki$- Gh~}dib Hf Non}j`dj

Oi}lns{ 9>$; %=199)7 35/>>$

[`bv`i" Ghed" idc Iwei} @ymib$ -Ohdnsi}p Qhb`kp" F`{kib Qhb`kp" Idc Khdf`cndkn$- @dsn}dis`hdib

Gh~}dib Hf Nkhdho`k{ Idc F`didkn ;$3 %=199)7 ==/;>$

Zn`{n" Kei}bn{ B$ -Qhb`s`kib Q}n{{~}n{ Hd Ohdnsi}p Qhb`kp C~}`dj Sen ^[ J}nis @dfbis`hd$-

Ion}`kid Nkhdho`k Gh~}dib7 Oik}hnkhdho`k{ 3$= %=19=)7 ;;/63$